New Report Makes the Case for State-Level Child Tax Credits
April 18, 2019Print
By Lauren Pescatore
State policymakers intent on reducing child poverty should look to the Child Tax Credit (CTC), according to a new report from the Institute on Taxation and Economic Policy and the Center on Poverty and Social Policy at Columbia University.
The Case for Extending State-Level Child Tax Credits to Those Left Out: A 50-State Analysis finds that expanding the CTC at the state level could lift up to 4.5 million children out of poverty and help families who were excluded from the 2017 expansion of the federal CTC. The report’s authors outline two proposals for doing so: creating state-level CTCs worth $2,000 per qualifying child, or, more ambitiously, creating state-level CTCs worth $3,600 per qualifying child age six and under and $3,000 per qualifying child older than six. The first proposal aims to fill in gaps left by the federal CTC, while the second proposal not only closes these gaps but also significantly expands the credit. The report offers a state-by-state analysis of each proposal’s cost and impact on child poverty.
According to the report, although the 2017 Tax Cuts and Jobs Act increased the value of the federal CTC, the earnings requirement and cap on refundability render more than 24 million children either ineligible for the credit or only eligible for a small amount. Not only would the two proposals help to close that gap, they also would extend the credit to more Black and Latinx children.
To read the full report and view the state-by-state analysis, click here.